Protein lipid modification, once thought to act as a stable membrane anchor for soluble proteins, is now attracting more widespread attention for its emerging role in diverse signaling pathways and regulatory mechanisms. Most multicellular organisms have recruited specific types of lipids and a suite of unique enzymes to catalyze the modification of a select number of proteins, many of which are evolutionarily conserved in plants, animals and fungi. Each of the three known types of lipid modification - palmitoylation, myristylation and prenylation - allows cells to target proteins to the plasma membrane, as well as to other subcellular compartments. Among the lipid modifications, protein prenylation might also function as a relay between cytoplasmic isoprene biosynthesis and regulatory pathways that control cell cycle and growth. Molecular and genetic studies of an Arabidopsis mutant that lacks farnesyl transferase suggest that the enzyme has a role in abscisic acid signaling during seed germination and in the stomata. It is becoming clear that lipid modifications are not just fat for the protein, but part of a highly conserved intricate network that plays a role in coordinating complex cellular functions.